The director of health shall make an inventory of existing hospitals and medical facilities including public, nonprofit, and proprietary hospitals and medical facilities, survey the need for construction and modernization of hospitals and medical facilities and, on the basis of such inventory and survey, develop a program for the construction and modernization of such public and other nonprofit hospitals and medical facilities as will, in conjunction with existing facilities, afford the necessary physical facilities for furnishing adequate hospital and medical facilities services to all the people of the state.